Casino leaders study coping with crises

20 November 2006

LAS VEGAS, Nevada -- Gaming companies are deploying a variety of communications and planning strategies to grapple with crises.

From transforming work forces into armies of grass-roots activists who battle harmful legislation to forming alliances with lawmakers in nongaming states, major casino operators are more actively protecting and promoting their industry's interests, according to a panel of experts who spoke Wednesday at the Global Gaming Expo.

The panel discussed how to address unanticipated emergencies ranging from hurricanes along the Gulf Coast to pandemic flu, but most of their discussion revolved around what moderator Alan Feldman, senior vice president of public affairs at MGM Mirage, described as the "daily challenge" of addressing the negative perceptions that beset gaming in some parts of the country.

Lori Nelson, director of corporate communications for Station Casinos, said the Las Vegas-based locals operator has an edge in maintaining a positive image because its employees and customers are often close-knit neighbors, thanks to Station's suburban outposts.

Station also broadly publicizes its appearances on lists such as Fortune's 100 Best Companies to Work For, which Nelson said can showcase the gaming industry's membership in mainstream Corporate America.

Charitable efforts are also part of Station's public relations, Nelson said. The company surveys its 14,000 employees on their concerns, and the issues that emerge most often -- education, health care and transportation among them -- merit philanthropic assistance from Station.

For Harrah's Entertainment, tapping into the company's 85,000 employees has substantially bolstered political-affairs efforts.

Rico Izaguirre, political director of Harrah's, said the company learned from its unsuccessful effort in 2003 to kill an Illinois law that raised the gaming tax from 50 percent to 70 percent.

"Our response was through lobbyists," Izaguirre recalled. "We said, 'You can't do that.' They did it anyway."

So executives of Harrah's launched the company's Winning Together program. The idea: to appoint political-affairs leaders at each of the operator's 40 properties to mobilize employees during political crises.

"If a politician has 4,000 (angry) employees from Metropolis (in southern Illinois) banging on the door, that sends a message," Izaguirre said.

Harrah's also publishes an employee newsletter that communicates potential political threats to the company and the gaming industry.

"There is no safe jurisdiction -- not even Nevada, if you consider issues like federal immigration bills," Izaguirre said.

Izaguirre said Harrah's can "instantly turn on" employee activism within an hour or two of learning about a prospective challenge to the industry. The company recruited employees to rally successfully for land-based casinos to replace the water-based riverboats that Hurricane Katrina destroyed along the Gulf Coast in August 2005.

Harrah's also holds on-site voter-registration drives for employees. Voter registration among its workers has jumped from 12 percent pre-Winning Together to 72 percent today, Izaguirre said. Harrah's doesn't take positions on political races, but the company arranges for employee transportation to the polls and will allow workers to arrive late or leave early to vote.

Nelson said Station encourages its employees to register to vote, and company officials take the community's political pulse by asking staff members what issues dominate conversation in their neighborhoods.

"We encourage our employees to have a voice," she said. "It does help the industry if we show a united front."

A unified effort is also essential to surviving unforeseen catastrophes, panelists said.

From food-borne illnesses to natural disasters, casino operators could face an array of potential perils.

Nelson said it's nearly impossible to develop a complete list of worst-case scenarios, most of which are out of managers' control.

The emphasis should instead be on establishing a standard formula for responding to any crisis.

"You want to identify the problem, fix it, say how you'll make the situation better and explain how you'll never let it happen again," she said.

Nelson said businesses court greater disaster if they refuse to discuss highly public problems.

"When something goes wrong, you can't put a price on communicating with honesty and integrity," she said. "Don't let others be your voice. If you don't tackle the issue, others will do it for you. They might create a public perception that's inaccurate and hard to change."

Nelson also warned that the media and industry watchers will revisit high-profile crises for years, so "fixing problems to the best of your ability" is vital.

"If your situation is used as an example later, you want your best practices out there," she said.

Manus Cooney, president of lobbying firm Potomac Counsel, said focusing on political affairs and image-building could pay dividends if calamity strikes gaming.

Panelists agreed that gaming-friendly congressional delegates in high places -- U.S. Sen. Harry Reid, D-Nev., is the new Senate majority leader, while U.S. Sen. Trent Lott, R-Miss., is now Senate minority whip -- will advance the sector's prospects on Capitol Hill.

But Cooney added that gaming boosters must spread word of the industry's "wonderful story" to representatives of nongaming jurisdictions if the sector is to benefit from federal legislation.

Following Hurricane Katrina, gaming lobbyists worked with Reid, Lott and other congressional delegates to include operators in federal tax breaks that would encourage rebuilding along the Gulf Coast.

Antigaming contingents played on fears of the gaming industry's social impacts to scuttle part of the casinos' incentive package, though.

"Had we more broadly communicated with moderate Republicans and Democrats about the importance of the industry to the economy in general, we'd have been in a better position," Cooney said.

Convincing representatives of nongaming states to embrace gaming will take time, Cooney said, because it's difficult for such delegates to see connections between their constituents and issues specific to the casino industry.

Feldman said publicizing gaming's wide-ranging economic influence could help. Remind the gaming-shy delegates from North Carolina, for example, that casinos are some of the biggest customers the state's furniture industry has.

"Look for impacts the industry has beyond the local," Feldman said. "Where does our money flow? The impact is profound when you consider all the goods and services the industry uses. Through those connections, we could develop relationships with people in nongaming states."

Feldman also recommended making time to meet with Congressmen when a crisis isn't on the table, and asking them for their opinions on issues affecting the business.

And don't forget to seek out not-so-obvious allies, Cooney said.

U.S. Sen. Orrin Hatch, R-Utah, hails from a conservative state where residents mostly eschew gambling. Many Utah firms do business with casinos, however, so Hatch has been helpful to operators.

"Antigaming troglodytes are constantly on the watch for chances to stick it to the industry," Cooney said. "It's important to educate Congress on what (gaming companies) are doing for nonprofits, and to tell them about the jobs and the health care we provide. We need to spread the word beyond our delegates. It takes time, investment and communication."

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